Normative Policy Implications from Recent Advances in the Economics of Innovation and Industrial Dynamics
Submitted by Bruno Chaves on 27 December, 2006 - 15:00.
(Update : Presentations)
The workshop, co-funded with the Open University centre on Innovation, Knowledge and Development (IKD), is meant to explore the normative implications of analyses on the nature of the processes of innovation and their impact on industrial structures and industrial change.
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A growing body of literature on industrial dynamics has highlighted the importance of understanding the process by which knowledge is created, absorbed, and appropriated, and the implications of this for the ways firms grow and industries are structured and change. An important part of such an analysis has concerned the empirical regularities characterizing innovative activities, e.g. the properties of particular "technological trajectories"; how process and product innovation change over the industry life-cycle; the effect of competence destroying/enhancing innovations on industry structure; the role of changing firm-specific routines in industry evolution. Insights about these empirical regularities in turn have fed a variety of models, which have helped a better understanding of the processes of industrial evolution conditional on different "regimes" of technological learning, different stages in the life cycles of industries, different patterns of competitive interactions.
Yet competition policies seem not to have incorporated these dynamic insights, so that much of EU and national competition policies remains relatively static, mostly confined to the detection of dominant positions – as revealed by the degrees of industrial concentration, and their possible "uncompetitive" exploitation.
The conference is meant to move beyond the limitations of this static approach to industrial policy, which ultimately uses as a normative yardstick the competitive general equilibrium, and the associated concept of “market failure”. In that, we want to explore the implications of the literature on the dynamics of innovation for the formulation of competition and more broadly industrial and innovation policies. Indeed we know since Schumpeter (and earlier Marx) that innovative activities undertaken by profit-motivated agents imply a systematic departure from the competitive zero-profit equilibrium conditions. Together we know also that the introduction of innovation is linked, to varying degrees, with the "creative destruction" not only of technologies and products but also of whole organizational entities which are forced to exit the market and are replaced by new ones. Clearly, in such a world, the evaluation of policy measures against yardstick of static "welfare triangles" is hardly adequate. But, then, how does one evaluate the needs and effectiveness of policies influencing e.g. competition, Intellectual Property Rights, bankruptcy, entry? Parts of the answer to such question might apply in general across sectors of activity and across countries. Other elements are going to be specific to different technologies and to the stage in the life cycle of different industries. Industry case studies are clearly called for, with most of the focus inevitably on “knowledge intensive” industries (pharmaceutical/biotech, telecommunications, computers, etc.).
Timetable:
- Conference announced April 13, 2006
- Deadline for extended abstracts submission (junior researchers): May 30, 2006
- Decision of paper acceptance (junior researchers): June 20, 2006.
- Full papers sent: November 15, 2006
Contacts:
- Administrative contact: Ms. Avis Lexton
- Organisational contact: Professor Mariana Mazzucato